Surprise: Retirees did fine in the recession

By Anne Tergesen

With the recession in the rear-view mirror, what was the economic impact on the nation’s fast-growing population of people aged 65 and older? According to a new Census Bureau report, the group as a whole fared pretty well – thanks in part to some smart financial decisions. Older people who were still employed, in particular, “experienced a milder recession” than their younger peers, the report says.

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The dark years were sunnier for those 65 and over.

Among the report’s recession-related findings:

Homeownership held steady. While overall homeownership rates in the U.S. declined from 69% in 2006 to 65.5% in 2012, the rate held steady—at 81%–for people 65 and over. Due in part to the fact that they have owned their homes for longer, on average, the older population “had built up greater equity,” the report notes, adding that as house prices climbed throughout the early 2000s, older homeowners were also “less likely to withdraw their home equity than younger homeowners.” Because only 47% of older homeowners have mortgages—versus 87% of those under age 50—they were also less likely to end up “underwater,” or owing more than their home’s value.

Investment losses were rarer. While nearly two-thirds of adults ages 50 to 64 experienced investment-related losses in 2008 and 2009, only 39% of the over-65 crowd said the same. The reason, the report says, is that “older and more experienced investors made more conservative investment choices than their younger counterparts” and were also more likely to hold diversified portfolios.

Joblessness was less severe. While unemployment rates rose for all age groups, they reached far higher levels for the youngest workers. For example, in 2010, with the nation’s overall unemployment rate at 9.6%, teenagers—ages 16 to 19—had an unemployment rate of 26%, while recent college graduates—ages 20 to 24—had a 15.5% jobless rate. Among those ages 55 to 64, though, the story was different: Only 7.1% were unemployed, up from 3.1% in 2007. And among people 65 to 69, the jobless rate was 7.6%, up from 3.3% in 2007. In 2010, the rate of employment among those ages 65 and older actually rose—to 16.2% from 14.5% in 2005. As a result, they were the only age group not to experience a decline.

Net worth stayed steady. From 2005 to 2010, median household net worth fell for all age groups except for those ages 65 to 69, “who experienced no significant change in net worth,” the report says.

The upshot for older households, the report says, is that they reported less financial distress than their younger counterparts. The percentage of households in distress in January 2010 ranged from 19%, among those ages 40 to 49, to 8% for those ages 60 to 69. (It was an even lower 3% for those ages 70 and over.)

That’s not to say all is rosy for older Americans. Those who lost jobs had a harder time finding new ones, with 49% of those ages 55 and older out of work for 27 weeks or more, versus 41% of those ages 25 to 54. Hit hard by declines in the stock market, 63% of those nearing retirement delayed their exit dates.

Among the report’s other findings, per the Census Bureau news release:

The number of Americans 65 and older living in a nursing home fell 20% between 2000 and 2010, from 1.6 million to 1.3 million.

Between 2000 and 2010, Internet usage for the 65-and-older population increased from 14.3% to 44.8%.

In 2010, there were 40.3 million people 65 and older, 12 times the number in 1900.

Florida was among the states with the highest proportions of older people in their populations in 2010, along with West Virginia, Maine and Pennsylvania (all above 15%).

The West and South regions experienced the fastest growth in their 65-plus and 85-plus populations between 2000 and 2010.

Sumter County, Fla. — home to The Villages, a huge retirement-community complex — had the nation’s highest median age among all U.S. counties in 2013, at 65.5 years.

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About Encore

Encore looks at the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities, needs and priorities of people saving for and living in retirement. Our lead blogger is editor Matthew Heimer, and frequent contributors include editor Amy Hoak, writer Catey Hill, and MarketWatch columnists Elizabeth O’Brien, Robert Powell and Andrea Coombes. Encore also features regular commentary from The Wall Street Journal retirement columnists Glenn Ruffenach and Anne Tergesen and the Director of the Center for Retirement Research at Boston College, Alicia H. Munnell.